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Tec7

Transaction Type: Acquisition and Growth Capital
Status: Current Investment
Sector: Electrical Retail
Investment Date: May 2007
Deal Size: £11.0 million

Endless Contact: Christopher Clegg

BACKGROUND

Tec7 Limited (“Tec7”) was established to acquire the business and assets of the electrical retail business previously operated in-house at House of Fraser, the leading department store retailer. The business is being led by Chief Executive Ravi Virdi, who until recently developed and led a highly successful electrical retail business at Micro Anvika Limited.

Tec7 will initially operate in 22 of the 60 House of Fraser stores nationwide http://www.tec7.co.uk and will focus on offering a range of leading-edge TV, audio, IT and multimedia products from a variety of premium brands including Sony, Bose, Apple, Panasonic and Samsung. A programme to refit all 22 stores over a 2 year horizon to create a stylish, high quality retail environment has already begun.

INVESTMENT COMMENTARY

Endless has acquired a majority stake in Tec7 and is providing the funding to support the initial acquisition from House of Fraser and growth capital to deliver the business repositioning. Additional working capital facilities have been provided by asset based lending specialist Secured Corporate Finance.

Demand for electrical retail products in the UK is expected to continue to outstrip consumer goods demand generally, particularly as the roll out of digital TV gathers pace and the concept of the “digital home” becomes a reality. With support from Endless and Non-Executive Director Dean Murray, the strategy for Tec7 will be to capitalise on these market trends to establish Tec7 at House of Fraser as the market leading electricals destination for the discerning customer. Tec7 will be offering the latest products from a range of high quality brands and a number of key points of difference to reinforce the dedication to quality, such as the free 5 year warranties on LCD televisions. In the longer term, the aim is for Tec7 to build on the foundation of a successful relationship with House of Fraser to encompass standalone stores and a transactional website offering.

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